How Kuwait Makes Money!
Submitted by rayboy on July 29, 2007 – 1:00 pm15 Comments
I was recently making a financial study on some business plan . i just had a thought which made me Ponder. Let me be honest …. Even though im an Expat, But im born and brought up here. I basically love Kuwait… But i should be quite open about this.
I personally Feel Kuwait Makes money in the following ways ( These are my estimates – I could be wrong – It may be more 
)
- OIL & Related Oil Products – 200Â Million KD. per Year.
- Traffic Fines – 100,000 KD per Year.
- Expat Visa, Residences, Penalities – 500,000 KD. per Year.
- Custom Duties for Imports – 150,000 KD. per Year.
- Business Fees and Taxes – 100,000 KD. per Year.
- Electricity , Water , Telephone Charges - 200,000 KD. per Year
- Medical Charges (at 1 KD per expat) – 100,000 KD. per Year
- Government run business / shares in realestate, finance sector etc – 10 Million KD. Per Year
I dont know if i missed out anything . Do write in. For a country this small, the revenue earned over various sectors is extremely large. Well dont we (kuwaitis and expats) expect some development in the country, in return?.
(2 votes, average: 3.00 out of 5)
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Shunu Haadaa…………
yea they are other sources of income too, ill dig for these and let you know. (There is something wrong with the numbers you wrote, not the details, but the way its written, like for instance, EXPAT VISAS… is that 5 million or 500,000?)
Samuel : More is to come
Patrick Semaan : Thanks, just added the “,” by mistake corrected it . do drop in the other sources
You make a fine point dude! There is a lot of money that goes into the country but apart from the money that is generated from oil and oil related products (which by the way is definitely more than 200 million KD) all the other revenue is retained by the same institution or government body for adminitrative expenses. As in clinics and hospitals retain the money for painting, maintennce, buying consumables etc. That is of course where corruption and overspending takes place. The salaries of the employees working in these bodies are paid from a fund by the government that is totally seperate from the collections. All roads and highways are also expensed to the state and the money that is collected through traffic fees and fines are not involved in any way here. That is where they need to pull up their socks. Since the state bodies mentioned don’t really care about the number of people walking into the clinics and hospitals as it is not a revenue generating center and their salaries are paid by the government irrespective of the outcome, they couldn’t care less about imrpoving facilities. However if the state withdraws supprt and asks these bodies to perform as independent profit centers they’d end up being run like companies and may actually make a profit.
Personally, I feel for a country to develop, tax and tax reforms play a huge part in the development. Unless it is heavily engineered towards commercialization like Dubai. Residents paying taxes in other countries have the right to question the government on reforms and changes. If you pay road tax in a country in Europe and you come across a road that is not in driving condition you have the right to bring it up to the authorities. The same goes for all public ameneties!
The key to judging a country’s progress is to judge its public services like public transport, police stations, electricity and water departments etc. These give you an idea of what kind of progress th country is making. I think Kuwait has a long way to go in terms of social and economic reforms but we’ll just have to wait and see!
Whoa! That’s a long and a interesting reply!
$200 million on oil?
Kuwait produces 2 million barrels of oil a day.
That 365×2 = 730 million barrels per year.
At a conservative estimate of $60 per barrel, that 43.8 billion annual income per year.
And that’s on a very conservative side.
BarryUno : the way you seem to say that income generated by these utilities sound “Unaccounted” … someone or some people maybe getting realy rich by this !!!
MPJS : yeah … quite descriptive too
Cajie : My calculations , were on least assumptions(minimum values). Infact , i had a chat with a kuwaiti friend of mine at work and we discussed about this . the way he said things are the following
OIL & Related Oil Products – 50 Billion KD. per Year.
Traffic Fines – 400,000 KD per Year.
Expat Visa, Residences, Penalities – 4 Million KD. per Year.
Custom Duties for Imports – 150,000 KD. per Year.
Business Fees and Taxes – 100,000 KD. per Year.
Electricity , Water – 500,000 KD. per year
Telephone Charges – 500,000 KD. per Year
Medical Charges (at 1 KD per expat) – 100,000 KD. per Year
Government run business / shares in realestate, finance sector etc – 1 Billion. Per Year
Further to this … my wife added below (below is true fact, as she handles this )
Taxes to Foreign companies : 30% Taxes on earnings which works to around – 5 Million KD. per year.
So your calculations were quite right
…. my question is that the non-oil revenues in such a small country is extremely high!
Does corruption and wasta system count in Kuwait?
Hmmm rayboy, suggestion … A post on what Kuwait spends on – focal point being money given to the locals (for what again??), their loans and debts wiped clean…. Whoever suggested that decision will have kids who are spoilt rotten, I betcha…
thats a good point! .. maybe i will make main topic post of it
u’ll be adding taxes in your list as a source of money. “SOON”
VEry.Q8ya : I hope that doesnt come soon.!!
lol .. whats with you and “locals”
what do you mean?
I need seeing kuwait of currency 20 issued in 1995